Unmasking Isomorphic Behaviors in Corporate Sustainability: Evidence From ESG Disclosure and Practices in Emerging Markets

Abstract

Using text analysis and machine learning techniques, this study constructs an ESG dictionary balancing global applicability and local characteristics, and empirically explores the isomorphic behaviors of ESG disclosure and practices among Chinese listed firms. The results show that both ESG disclosure and practices exhibit significant mimetic isomorphism, with asymmetry in their isomorphic strength. Rather than leading or lagging peers, companies tend to select the average level of their peers as a reference target in ESG disclosure and practices. The moderation test of external factors shows that institutional investor shareholdings reinforce the peer effect of ESG disclosure, while market competition mitigates the peer effect of ESG practices. Heterogeneity analysis suggests stronger ESG disclosure isomorphism among companies with closer political connections and stricter environmental regulations. Further investigation uncovers stratified isomorphism within groups, where companies with superior ESG disclosure and practices pursue higher standards, while those lagging behind tend to remain stagnant. Additionally, dynamic analysis of industry leaders and followers confirms the existence of a bottom-up learning effect driven by information cascades and a self-reinforcing loop triggered by competitive dynamics. This study extends the boundaries of isomorphism theory and provides empirical evidence from emerging markets for global ESG research.